Seniors are digging deep and stretching household budgets further to meet a comfortable living standard in retirement due to ongoing increases in the cost of living, according to the Association of Superannuation Funds of Australia (ASFA).
New data released by the superannuation industry body found the annual expenditure needed to reach ASFA’s defined comfortable retirement standard rose 1.3 per cent in the September quarter to hit a record high of $71,724 per year for couples.
Retirees living alone require $50,981 per year for a comfortable lifestyle, marking a 1.5 per cent rise from the last quarter and bringing the annual increase to 5.5 per cent.
A significant factor driving the rise in living costs was the increase in electricity prices, which went up by 4.2 per cent in the September quarter. Households not eligible for electricity rebates experienced an even steeper surge, facing an 18.6 per cent increase.
ASFA noted fuel prices also experienced a notable jump of 7.2 per cent, and council rates increased by 4.4 per cent in the quarter. Additionally, water and sewerage costs rose by 4.7 per cent, collectively placing added strain on household budgets.
“Retiree budgets have been under sustained pressure for the last two years. In the past 12 months alone, utility prices have surged more than 12 per cent as the cost of electricity, water and gas continues to rise,” ASFA interim chief executive Leeanne Turner said.
Additionally, a separate report released by ASFA today revealed superannuants approaching retirement age may not have a sufficient superannuation account balance to enjoy a comfortable or even modest retirement.
The report disclosed individuals approaching retirement hold median superannuation account balances of $213,986 for men and $201,333 for women.
Previous research from the superannuation body revealed only 25 per cent of individuals between the ages of 70 and 79 had funds in their super accounts at the time of their passing. In contrast, 90 per cent of those aged 80 and above had no funds in their accounts before their death.
“Not having enough superannuation in retirement is a much greater challenge than the relatively few older individuals not spending all of their superannuation during their lifetimes,” Turner said.
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